The industry faces a double-whammy tax rise following the increase in Air Passenger Duty announced on Monday after the Treasury confirmed APD will remain alongside the cost of emissions trading.


APD on long-haul fares will increase substantially in a year and again in November 2010 after chancellor Alistair Darling retreated on a pledge to replace the tax with a new aviation duty.


It will remain in place when airlines join the European emissions trading scheme (ETS) in 2012, with the costs of participation added to fares.


The trade repeated appeals for a single tax on flights following Darling’s announcement, with ABTA saying: “British travellers should not be penalised by double taxation.” A TUI Travel spokeswoman said: “We expect APD to be removed once carriers enter the emissions trading scheme.”


But in a document explaining why it ditched aviation duty, the Treasury states: “The government continues to believe there is a case for domestic measures alongside the European Union ETS and the decision to retain APD will contribute to the long-term aviation environmental framework.”


That will only intensify industry anger over the continued rating of premium economy seats on a par with business class and the future increases in duty on longer flights.


The only compensation is that the Treasury has given a year’s notice of the changes and the new four-band system of charges bears some relation to distance.


The changes will add £15 to an economy fare to Australia from next November and £45 from November 2010. Air Passenger Duty is currently £10 on short-haul economy flights and £40 long-haul, with premium seats taxed at double these rates.


From November 2009 there will be four bands with the following economy rates:


● Band A: £11 to Europe, Turkey, Tunisia, Morocco, the Canary Islands, Moscow


● Band B: £45 to Egypt, the US, Middle East, West Africa


● Band C: £50 to the Caribbean, Mexico, Brazil, India, Hong Kong, Thailand, South Africa


● Band D: £55 to Australia, New Zealand, Singapore, Bali, Peru, Argentina.


APD will rise again in November 2010 – to £12 for band A, £60 band B, £75 band C and £85 band D.


The Treasury noted considerable opposition to the proposed aviation duty from scheduled airlines, airports, freight firms and business.